Learning the lessons of North Dakota

February 3, 2014

West Virginia may be in the midst of a $143 million budget shortfall this year, but Senate President Jeff Kessler, D-Marshall, thinks he has found a way to come up with the additional new revenue needed to overcome that problem. His plan is to emulate what he learned when he visited the state of North Dakota.

Kessler said a few years ago, North Dakota was losing population just like West Virginia. He said nobody "wanted to go to North Dakota because there was no opportunity there."

But because of the gas drilling business there, North Dakota became the fastest growing state in the nation while West Virginia was one of only two states that lost population.

North Dakota has capitalized on its fossil fuel industry by setting aside some of its tax collections for a Legacy Fund. And in 20 months, the state had $1.5 billion - far more than the $900 million that it took West Virginia 20 years to save in its Rainy Day Fund.

So the Senate President wants to create a Future Fund by setting aside five percent of the severance tax on oil and gas drilling. If the state had done this with the coal severance tax beginning in 1975, Kessler estimates the state would have $8 billion in reserves earning $800 million a year at 10 percent interest.

"We would be a completely different state today," he said. "What could we do with $800 million?"

His belief is that the state's roads could all be paved in a two-year cycle instead of looking for an extra $1 billion the Division of Highways needs for road maintenance. But even more importantly, this size of a "nest egg" would enable the state to retain its "most precious resource."

West Virginia currently spends about $100,000 per child to educate its students from elementary school through college. But once those students graduate, they tend to leave because of lack of employment opportunities.

"We should not be surprised that we're 49th or 50th," Kessler claims. "Our best and our brightest are gone." He compares this loss of educated young people as much the same as a manufacturing company that discards one of its products for every one it builds.

North Dakota became the fastest growing state because of its gas drilling business. And it capitalized on the fossil fuel industry by setting aside some of the new tax money collected for a Legacy Fund. In 20 months, the state had $1.5 billion - more than the $900 million it took West Virginia 20 years to save in its Rainy Day Fund.

Now, Kessler believes, the oil and gas industry can give West Virginia a "second bite of the apple" by investing a baseline percentage of the severance tax the industry already pays and invest it for future growth.

Meanwhile, two members of the House of Delegates were injured in separate incidents in January. Delegate Tiffany Lawrence, D-Jefferson, told her colleagues in the House during a floor speech last Monday (Jan. 27) that she nearly lost sight in one eye after she bathed in water that had been declared safe at a Charleston hotel.

She said her doctors didn't definitely link the infection above her right eye with the Jan. 9 leak of some 10,000 gallons of chemicals at Freedom Industries along the Elk River, but said they repeatedly asked about contact with any contaminated water. She said she took a shower at her Charleston hotel the following Tuesday and then spent parts of five days hospitalized with an infection above her right eye. She said she noticed "some sediment and everything else in the sink. I should have known better."

Delegate Anthony Barill, D-Monongalia, was unintentionally shot by his son at their Morgantown residence Saturday morning, Jan. 25. According to a news release from Morgantown police, Barill was asleep when a bullet went through the floor and the bed and hit him in the lower leg.

The 80-year-old legislator told police his son, Bradley, might have fired the shot. Members of a special police response team found the son in the residence with a gunshot wound that appeared to be self-inflicted. He was pronounced dead at the scene. Delegate Barill was treated at Ruby Memorial Hospital.

Finally, the most expensive statewide election campaign this year to win the six-year term in the United States Senate being vacated by retiring Sen. John D. Rockefeller, D-WV, seems almost certain to be the race between U. S. Representative Shelley Moore Capito, a Republican, and Secretary of State Natalie Tennant, a Democrat. And right now Rep. Capito has a substantial edge in campaign funds.

Last week, Rep. Capito reported she has raised $4.94 million since beginning her campaign in late 2012. Tennant only entered the race near the end of the third quarter in September and had raised less than $800,000 by the end of 2012 - nearly $650,000 of it in the fourth quarter of the year. Both women will have at least two opponents in the party primary elections in May, but both are heavy favorites to win their respective primaries with ease.